Market Review, Commodities, Currencies, Economic & Corporate Update - 10.10.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, amid concerns over ongoing geopolitical tensions in the Middle East.
  • Retailers, SPAR Group (JO: SPPJ ), Cie Financiere Richemont S.A. (JO: CFRJ ), Mr Price Group (JO: MRPJ ), Shoprite Holdings (JO: SHPJ ) and Clicks Group (JO: CLSJ ) dropped 2.3%, 1.9%, 1.6%, 1.4% and 1.0%, respectively.
  • Lenders, Standard Bank Group (JO: SBKJ ), Nedbank Group (JO: NEDJ ) and FirstRand (JO: FSRJ ) declined 1.9%, 1.0% and 0.4%, respectively.
  • Pharmaceutical companies, Netcare (JO: NTCJ ) and Aspen Pharmacare (JO: APNJ ) shed 1.5% and 1.1%, respectively.
  • On the flipside, gold miners, AngloGold Ashanti (JO: ANGJ ) and Gold Fields (JO: GFIJ ) advanced 5.9% and 3.7%, respectively.
  • Platinum miners, Anglo American Platinum (JO: AMSJ ), Northam Platinum (JO: NHMJ ) and Impala Platinum (JO: IMPJ ) gained 5.6%, 5.0% and 3.5%, respectively.
  • The JSE All Share index marginally declined to close at 71,648.38.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, amid worries over growing conflict in the Middle East.
  • Travel and leisure companies, International Consolidated Airlines S.A. and InterContinental Hotels Group (LON: IHG ) edged down 6.1% and 2.9%, respectively, amid surge in fuel prices and after several international carriers suspended flight services to Israel.
  • Retailers, JD Sports Fashion (LON: JD ), Burberry Group (LON: BRBY ) and Tesco (LON: TSCO ) dropped 3.1%, 2.0% and 1.4%, respectively.
  • Banking firms, Barclays (LON: BARC ), HSBC Holdings (LON: HSBA ) and Lloyds Banking Group (LON: LLOY ) shed 1.8%, 1.5% and 1.2%, respectively.
  • On the other hand, energy companies, BP (LON: BP ) and Shell (LON: RDSa ) advanced 2.9% and 2.6%, respectively, tracking higher crude prices.
  • The FTSE 100 index marginally declined to close at 7,492.21.

US MARKET REVIEW

  • US markets ended higher yesterday, as investors assessed dovish comments from the US Federal Reserve (Fed) officials.
  • Energy companies, Devon Energy Corporation (NYSE: DVN ), Exxon Mobil Corporation (NYSE: XOM ) and Chevron Corporation (NYSE: CVX ) advanced 5.5%, 3.5% and 2.8%, respectively.
  • Media and Entertainment company, Walt Disney (NYSE: DIS ) rose 2.1%, amid news that activist investor Nelson Peltz’s Trian Fund Management has increased its stake in a bid to get several more seats on the company’s board.
  • On the contrary, airlines companies, United Airlines Holdings (NASDAQ: UAL ), Delta Airlines (NYSE: DAL ) and American Airlines Group (NASDAQ: AAL ) shed 4.9%, 4.7% and 4.1%, respectively, amid higher oil prices and suspension of direct flights to Tel Aviv.
  • The S&P 500 index rose 0.6% to settle at 4,335.66, while the DJIA index advanced 0.6% to close at 33,604.65.
  • The NASDAQ index climbed 0.4% to end the trading session at 13,484.24.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning. In Japan, transportation company, Kawasaki Kisen Kaisha (TYO: 9107 ) has jumped 6.5%.
  • On the flipside, airlines company, Japan Airlines (TYO: 9201 ) has declined 1.8%.
  • In Hong Kong, internet technology company, NetEase (NASDAQ: NTES ) has advanced 3.6%.
  • On the other hand, gas supply company, ENN Energy Holdings (HK: 2688 ) has shed 1.7%.
  • In South Korea, weapon systems company, Firstec Company (KS: 010820 ) has surged 11.3%.
  • On the contrary, robotics company, Doosan Robotics (KS: 454910 ) has dropped 6.4%.
  • The Nikkei 225 index is trading 2.5% higher at 31,766.75.
  • The Hang Seng index has advanced 1.1% to trade at 17,718.85, while the Kospi index is trading 0.6% higher at 2,422.60.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.4% to trade at $87.82/bl.
  • Yesterday, Brent prices rose 4.2% to settle at $88.15/bl, as ongoing geopolitical tensions between Israel and the Palestinian Islamist group Hamas raised supply concerns.
  • At 05:30 SAST today, gold prices advanced 0.1% to trade at $1,863.32/oz. Yesterday, gold gained 1.6% to close at $1,860.88/oz, as military conflict in the Middle East boosted demand for the safe haven yellow metal.
  • Yesterday, copper rose 1.6% to close at $8,015.40/mt. Aluminium closed 0.2% lower at $2,238.39/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar.
  • The yield on benchmark government bonds rose yesterday. The yield on the 2030 bond advanced to 10.93% while that for the longer-dated 2040 issue rose to 12.92%.
  • At 05:30 SAST, the US dollar is trading marginally higher against the South African rand at R19.3376, while the euro is trading marginally higher at R20.4373. At 05:30 SAST, the British pound has gained marginally against the South African rand to trade at R23.6738.
  • Yesterday, the euro declined against most of the major currencies. In Germany, industrial production declined in August, on weak construction and energy output. In the eurozone, the Sentix investor confidence index weakened in October, amid recessionary trends in the region. In the UK, the BRC like-for-like retail sales rose less than expected in September.
  • At 05:30 SAST, the euro slipped marginally against the US dollar to trade at $1.0568, while it has gained marginally against the British pound to trade at GBP0.8638.

ECONOMIC UPDATES

  • In the UK, the BRC like-for-like retail sales rose 2.8% on a YoY basis in September, less than market expectations for a rise of 3.1%. The BRC like-for-like retail sales had advanced 4.3% in the previous month.
  • In Germany, seasonally adjusted industrial production dropped 0.2% on a MoM basis in August, more than market expectations for a drop of 0.1%. Industrial production had declined a revised 0.6% in the previous month.
  • In the eurozone, the Sentix investor confidence index dropped to a level of -21.90 in October, less than market expectations and compared to a level of -21.50 recorded in the previous month.
  • In Japan, trade surplus on a BOP basis widened to JPY749.50bn in August, compared to a surplus of JPY68.20bn recorded in the prior month.
  • In Australia, the Westpac consumer confidence index rose 2.9% in October, compared to a fall of 1.5% recorded in the previous month.
  • In Australia, the NAB business confidence index fell to a level of 11.00 in September, compared to a level of 13.00 recorded in the prior month.

CORPORATE UPDATES

SOUTH AFRICA

  • Gold Fields Limited (JO: GFIJ ): The gold mining company announced the appointment of Mr Michael (Mike) Fraser as Chief Executive Officer (CEO) and Executive Director, with effect from 1 January 2024. Mr Fraser would succeed Mr Martin Preece, who served as Interim CEO and Executive Director.
  • Famous Brands Limited (JO: FBRJ ): The food company, in its trading update for the six months ended 3 August 2023, indicated that it expects HEPS to be between 221.00c and 178.00c, compared with 215.00c recorded in the previous year. Moreover, it expects basic EPS to be between 225.00c and 174.00c, as compared with 259.00c recorded in the previous.
  • Oil prices surge on Israel-Hamas clashes: Oil prices surged more than 2.0% as military clashes between Israel and the Palestinian Islamist group Hamas ignited fears of a wider conflict in the Middle East.

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